Day: April 12, 2018

LOS ANGELES – The Board of Supervisors voted Tuesday to have the county’s auditors review changes made by the Los Angeles Homeless Services Authority to resolve past-due payments to service providers and better position the agency to manage a big jump in Measure H revenues.

A county audit released last week concluded that LAHSA was understaffed and had routinely failed to pay service providers on a timely basis, based on data for the period ending Oct. 25.

Phil Ansell, who heads the county’s Homeless Initiative, assured the supervisors that “the most serious issues identified by the auditor-controller … have been resolved.”

Ansell said the county advanced the agency $40 million to fix a cash flow problem caused in part by a mismatch in the timing of tax collections and billings for service. Invoices are now paid within seven days of receipt, he told the board.

“No provider in Los Angeles County should ever have to borrow money to provide services” funded by Measure H, Ansell said.

Program services under Measure H include providing shelter, assistance with housing and social services to homeless families and individuals.

The county knew LAHSA would have to ramp up operations as it moved to increase revenues from $94 million in the fiscal year 2016-17 to $234 million in 2017-18 due to Measure H funding. Some service providers expressed concerns about their own capacity constraints in the face of growing demand, prompting Chief Executive Officer Sachi Hamai to request the LAHSA audit.

“Over 70 percent of payments owed to their contractors were past due,” Auditor-Controller John Naimo told the board.

Auditors also found the agency slow to collect federal grant money and understaffed to handle the anticipated workflow.

In a written response to the audit, LAHSA Executive Director Peter Lynn told Naimo that LAHSA is working to transform the way it does business, in part through hiring independent management and business processes consultants and buying a new contract management system.

Both LAHSA and the audit letter referenced “significant improvements” since the time of the review, which was based on sampling during some portion of the 2017-18 fiscal year.

LAHSA officials say they plan to make 13 new finance hires and are engaged in a national search for a new chief financial officer.

Hamai told the board she was reaching out to county department heads for ideas and might announce some interim staffing as early as two weeks from now.

The supervisors cautioned against misinterpretation of the audit, which identified understaffing and concerns about processing payments, but no misuse of funds.

“What people take away from the news reports is that their money is not being properly spent, (which) could not be farther from the truth,” Supervisor Kathryn Barger said. “We are making a difference.”

Supervisor Sheila Kuehl agreed, saying, “The money is all going exactly where we said it would go.”

Hamai said she would report back to the board within 30 days on where the agency stands.

LOS ANGELES – The Los Angeles County Board of Supervisors Tuesday praised a $30.8 billion budget recommended by the county’s chief financial officer for the 2018-19 fiscal year as reflective of its priorities and values.

“This budget reflects our determination to confront homelessness, the dearth of affordable housing and the need for criminal justice reform,” Supervisor Mark Ridley-Thomas said. “It also expands access to health services and an equitable economy, ventures into innovations in technology and biosciences and celebrates the arts.”

The preliminary budget was released Monday by CEO Sachi Hamai, who highlighted its emphasis on the social safety net.

“This budget demonstrates the county’s determination to address the region’s most difficult social issues through bold action, elevating the quality of life for all residents, no matter what their circumstances or paths,” Hamai said.

Several of the board members focused on the fight against homelessness, which Hamai called the most urgent and complex issue facing the county. The budget includes $374 million to fund that battle, an increase of more than $100 million as the county collects its first full year of the quarter-cent sales tax increase mandated by Measure H.

County workers were able to move 3,000 families and individuals into permanent supportive housing in the last six months of 2017 and roughly 7,000 people into crisis, bridge and interim housing during that same period, according to Hamai. However, those numbers would be expected to increase dramatically given the additional funding.

Other areas of major spending include child welfare, health services and criminal justice reforms.

Supervisor Sheila Kuehl pointed to 100 new positions budgeted to help find and support more families to care for foster children, as advocates move away from group home care. Kuehl also said she hoped to increase a recommended $45 million for affordable housing to $60 million.

This is just the first step in a process that will include public hearings on the budget, the first of which is scheduled for May 16, followed by a series of board deliberations set to start June 25.

Many members of Service Employees International Union Local 721 and other unions representing county employees chose not to wait until May, urging the board Tuesday to pay them more.

“Gas, food, tuition and rent is through the roof,” David Dunbar, who works in the Department of Public Social Services, told the board. “In short, 2 percent (in a cost of living increase) just absolutely won’t pay the rent.”

The county expects continued economic growth, though at slowing pace, estimating a 5.7 percent increase in property tax collections and a 2 percent uptick in sales taxes paid. The overall budget is down about 2.5 percent from last year, or $800 million, however, due to one-time expenditures in the prior year.

The county expects to open up 477 new positions, bringing the total of potential county employees to more than 111,000. Most of the new spots are slated in the area of healthcare and children and family services.

Expanding patient care will include ramping up mental health care and devoting nearly $80 million to substance abuse programs. Another $52 million is budgeted for foster and adoptive care programs.

Anticipated spending on juvenile justice reform includes $26.9 million on programs intended to reduce recidivism and $18.8 million on diversion programs and housing for young people.

The budget also reflects an increase in spending on technology and analytics to gauge the success of the county’s efforts to solve these pressing problems.

However, the county still has unmet needs, Supervisor Hilda Solis said.

Shifts may also be necessary to accommodate state and federal budget cuts. President Donald Trump has proposed more than $1.6 trillion in cuts to entitlement programs like Medicaid, food stamps and affordable housing, for example.

“If enacted, those cuts would profoundly affect our ability to deliver services to the needy here in Los Angeles County,” Hamai said during an earlier presentation.

Nearly 60 percent of the county’s budget is allocated to health and public assistance.

Other federal proposals could help fund county projects, including infrastructure spending.

The recommended county budget includes nearly $1 billion in capital spending to build or renovate county facilities this year.

Those planned projects include investments in a psychiatric center at Harbor-UCLA Medical Center, a San Fernando mental health clinic and repairs to county animal shelters.

The list also includes $84 million for development of the plan to replace the deteriorating Men’s Central Jail.

The latest available estimated cost for that project — to build a modern facility centered around medical, mental health and substance abuse treatment — is $2.2 billion.

Many activists have fought against the new jail, arguing that the county should instead close the downtown facility and focus on diversion and community resources as a means of reducing the inmate population.

Hamai defended the project Monday, saying the existing jail is in such disrepair that it “no longer meets the needs of the county.”

The pace of work on the project appears slow, however, as about $84 million was also budgeted last year and less than $6 million is expected to be spent by June 30, according to budget documents.

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